DAEWOO SHIPBUILDING: May Face Crisis in April Due to DebtsSTX CORP: SM Group Picked as Preferred Bidder

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ASMARK2 PTY: First Creditors' Meeting Set for March 22------------------------------------------------------A first meeting of the creditors in the proceedings of Asmark2Pty Ltd, formerly "Ausurv Surveyors Pty Ltd", will be held atVibe Hotel Darwin Waterfront, Mauna Loa Room, Level 1, 7Kitchener Drive, in Darwin, NT, on March 22, 2017, at10:30 a.m.

Hamish MacKinnon and Michael Quin of Bent & Cougle were appointedas administrators of Asmark2 Pty on March 10, 2017.

G. G. ENGINEERING: First Creditors' Meeting Set for March 24------------------------------------------------------------A first meeting of the creditors in the proceedings of G. G.Engineering (Aust) Pty Ltd will be held at Grant ThorntonAustralia Limited, The Rialto, Level 30, 525 Collins Street, inMelbourne, Victoria, on March 24, 2017, at 11:00 a.m.

Stephen Robert Dixon & Ahmed Bise of Grant Thornton Australiawere appointed as administrators of G. G. Engineering on March14, 2017.

-- S&P's view of the credit risk of the underlying collateral portfolio, including S&P's view that the credit support is sufficient to withstand the stresses it applies. The credit support for the rated notes comprises note subordination.

-- The availability of a retention amount, amortization amount, and yield reserve, which will all be funded by excess spread, but at various stages of the transaction's term. They will have separate functions and timeframes, including reducing the balance of senior notes, reducing the balance of the most subordinated notes, and subject to conditions pay senior expenses and interest shortfalls on the class A1, class A2, and class A3 notes.

-- S&P's expectation that the various mechanisms to support liquidity within the transaction, including a liquidity facility equal to 3.0% of the outstanding balance of the notes, and principal draws, are sufficient under S&P's stress assumptions to ensure timely payment of interest.

-- There is a condition that a minimum margin will be maintained on the assets.

The issuer has not informed Standard & Poor's (Australia) PtyLimited whether the issuer is publically disclosing all relevantinformation about the structured finance instruments that aresubject to this rating report or whether relevant informationremains non-public.

ASIC's application for the appointment of provisional liquidatorswas based on a number of concerns, including that the companieshad been involved in multiple contraventions of the corporationslegislation and are not complying with their obligations underthat legislation, were not being properly managed, and aresuspected to be insolvent.

Justice Barker, having regard to ASIC's concerns, ordered theappointment of provisional liquidators to the companies. Underthe orders made, the provisional liquidators are to provide tothe court within 45 days a report, which includes:

* the identification of the assets and liabilities of each of the companies;

* an opinion as to the solvency of each of the companies;

* the likely return to creditors and any other information necessary to enable the financial position of the companies to be assessed; and

* any suspected contravention of the Corporations Act 2001 by any of the companies or their directors/officers.

The Court has listed the matter for a case management conferenceon May 30, 2017.

The provisional liquidator appointment is part of ASIC's ongoinginvestigation into a number of land developments in the Pilbararegion of WA, one in particular known as "The Newman Estate",which was subject to ASIC action and Federal Court permanentrestraint orders in May last year.

ASIC's investigation is ongoing.

ROLLCANO PTY: First Creditors' Meeting Set for March 23-------------------------------------------------------A first meeting of the creditors in the proceedings of RollcanoPty Ltd will be held at Level 3, 15 Ogilvie Road, in MountPleasant, on March 23, 2017, at 3:00 p.m.

Mervyn Kitay of Worrells was appointed as administrator ofRollcano Pty on March 13, 2017.

Capex surged to CNY3.6 billion in 2016, from CNY1.2 billion in2015, an amount much higher than Fitch previous expectation ofCNY1.5 billion. The capital expenditure was mainly used to expandLesso's production bases and its Lesso Mall e-commerce platform.

Despite the higher capex, net leverage remained low, with netdebt/operating EBITDA of less than 1x, following a net cashposition of CNY15 million in 2015. Fitch expects Lesso's netleverage will stay low in 2017 due to its strong top-line growth,stable operating EBITDA margin and lower 2017 capex.

The company recorded strong 2016 performance, driven by 12.8% yoyrevenue growth to CNY17.2 billion, which was boosted by strongvolume growth from better construction demand, and EBITDA marginexpansion to 17.3%, from 16.6%, thanks to economies of scale andan effective procurement strategy.

Lesso's rating remains constrained by its region concentration,as its revenue from southern China accounted for 59.8% of totalrevenue in 2016.

CHINACAST EDUCATION: Recovery for Unsecureds Unknown Under Plan---------------------------------------------------------------ChinaCast Education Corporation filed with the U.S. BankruptcyCourt for the Southern District of New York a disclosurestatement dated March 1, 2017, referring to the Debtor's plan ofreorganization.

Class 6 General Unsecured Claims -- estimated at $12,367,282 --is impaired by the Plan. Estimated recovery for this class isunknown. Shares in assets remaining after unclassified claimsand Classes 1-3 are paid in full pari passu with Classes 4 and 5.

Unless otherwise provided in the Plan, the Debtor and theLitigation Trust, as applicable, will use the proceeds of the DIPFinancing and other funds held by the Debtor on the EffectiveDate, (i) to make cash distributions required by the Plan on theEffective Date, (ii) to fund the Administrative Reserve to theextent necessary to satisfy Section 1129(a)(11) of the BankruptcyCode, (iii) to pay other expenses of the Chapter 11 Case, to theextent so ordered by the Court, and (iv) for general purposes tofund the Litigation Trust.

ChinaCast Education Corp. owned and operated three universitiesin China: the Foreign Trade and Business College of ChongqingNormal University, the Lijiang College of Guangxi NormalUniversity and the Hubei Industrial University Business College,in addition to internet-based interactive distance learningapplications, multimedia education content delivery, andvocational training courses.

The rating reflects Yuhuang's track record of stable margins forits China operations, as a result of diversification, verticalintegration and strategic cooperation with national oil companies(NOCs). The rating has also incorporates the financing andexecution risks for its US methanol project, which is a largeinvestment for Yuhuang, and the resultant pressure on its creditprofile during construction.

The rating also takes into account vulnerability to future pricevolatility of raw materials and end-products in China, andmethanol once the US project starts commercial operations. ThePositive Outlook reflects the potential for positive ratingaction should Yuhuang continue to demonstrate robust cashgeneration from its China operations, together with strong capexdiscipline and sound execution of the US methanol project.

The final rating on the proposed notes is contingent upon thereceipt of documents conforming to information already received.

KEY RATING DRIVERS

Diversified Product Offering: Yuhuang's product range includesrefined oil products, styrene, methyl tertiary-butyl ether(MTBE), C5 products, dimethyl ether (DME), liquefied gas,polybutadiene rubber and expanded polystyrene (EPS). It extendedthe product-value chain further to include ethanolamine,butadiene, and styrene-butadiene-styrene (SBS) in 2016. Itsproducts are mostly commodity chemicals; however, the productsgenerally have wide end-applications. So, unlike Yuhang'sspecialty chemical peers in China, Yuhuang's sales volume andprofitability are not tied to one particular industry, and itsmargin has been very stable in the last five years.

Vertical Integration, Cooperation with NOCs: Vertical integrationapplies along the production-value chain for many of itsproducts, which brings greater flexibility in sales, fewerconstraints from raw material supply, and a relatively stablemargin. The company enjoys a very high capacity utilisation ratefor most of its products, which also benefits from this verticalintegration. Its cooperation with NOCs for the procurement of rawmaterials and sales of final products also secures both rawmaterial and distribution channels for its production.

Risks with US Project: Yuhuang plans to spend approximatelyUS$1.2 billion to build a methanol plant in the US. The companyexpects capex to be funded by an US$800 million syndicated bankfacility, the proposed US dollar bond, and Yuhuang's initialequity contribution of around US$160 million. This project has aplanned capacity of 1.7 million tons. Land construction hasalready started, and the company expects the plant to commenceoperations in early 2019.

This investment entails some execution risks. However, thecompany has tried to address some of the risks through usage ofproven technology; employing experienced engineering, procurementand construction (EPC) contractors on a lump-sum cost basis; andrecruiting senior personnel from the US chemical industry. Thecompany is yet to finalise the US project loan, which Fitchbelieves is in the advanced stages. Yuhuang intends to involve astrategic partner to contribute equity and potentially off-takeall of the methanol plant's output, although it is possible thatYuhuang may fully own the project.

Robust Methanol Market: Fitch expects that long-term demand formethanol can be supported with more demand from non-traditionalusers. China's new methanol-to-olefins (MTO) capacities will bethe key to drive global demand. Fitch does not expect much newsupply in North America, due to relatively long permitting andconstruction periods. This could help to support the methanolprice in the medium term. However, methanol prices have beenvolatile and highly correlated with oil prices. The rebound inmethanol prices might spur fresh interest in capacity addition.Higher-than-expected capacity expansion could significantlypressure methanol prices in a lower-oil-price scenario over thelong term.

Commodity-Price Volatility: Most of Yuhuang's products arecommodity chemicals that are subject to the price volatility ofboth raw material and end-products. Yuhuang's market share isrelatively small, and it is a price-taker. Productdiversification and vertical integration help reduce marginvolatility, although its cash generation is still affected bycommodity price movements and any change in the supply/demanddynamics of its end-products. The addition of methanol in the USwill add to Yuhuang's diversification. However, methanol has alsoexhibited price and margin volatility.

High Capex, Discipline Key: Yuhuang has generated negative FCF inthe previous four years due to high capex to expand its productoffering and capacity in China. With most of the domesticprojects completed in 2016, Fitch expects its annual capex forthe China operations to decline from CNY2 billion-3 billion toCNY0.4 billion-1 billion in the next four years, which could leadto positive FCF generation and reduce the financial leverage atits China operations. Fitch's Positive Outlook on Yuhuang factorsin Fitch views that the company's expansionary capex in Chinawill not be heavy before the US plant is fully operational. Asignificant increase in domestic capex will reduce financialflexibility - which is negative for its credit profile.

High Leverage: Yuhuang's leverage (as measured by FFO-adjustednet leverage) was high at 5.1x in 2015 (this also includes off-balance sheet debt arising from financial guarantees provided toobligations of third parties; excluding these liabilities,leverage is around 4.2x). Fitch expects its leverage to increasefurther to around 6.5x (5.4x if excluding third-party guarantees)by 2018 due to the debt associated with the US project, which isguaranteed by Yuhuang and its subsidiaries. However, someimprovement is likely once the US project starts to generateoperating cash flows. Cooperation with a potential strategicinvestor for the US project could help to reduce leverage, butnot to a great degree.

Guarantee Structure, Recovery Ratings: The Recovery Rating of'RR4' assigned to the proposed notes reflects average recoveryprospects. The notes are to be guaranteed by Yuhuang. The up-to-USD800 million US project loan will be guaranteed by Yuhuang andseveral of its key onshore subsidiaries (each accounting for 20%-30% of group EBITDA) on a joint basis totalling 100%. In Fitchrecovery analysis Fitch has treated the portion of the US projectdebt that is guaranteed by the subsidiaries as prior ranking tothe proposed US dollar notes.

DERIVATION SUMMARY

Yuhuang's final rating of 'B' incorporates its track record ofstable margins for its China operations, which is coming off aperiod of high capex and likely to generate positive FCF, as thecompany completed most of the expansion projects in 2016. Yuhuangbenefits from diversified end-applications compared with other'B' category-rated chemical peers like China XD Plastics Co Ltd(B+/Stable), which is exposed to the cyclicality of the autoindustry. These benefits are reflected in its stable margin trendand stable working-capital movements. However, Yuhuang's leveragelevel is higher, and the margin is thinner than at China XDPlastics. Shanghai Huayi (Group) Company (BBB-/Stable, standalonerating at BB/Stable) also enjoys diversification, and has similarleverage at Fitch forecasts leverage level for Yuhuang's Chinaoperations. Shanghai Huayi's margin is weighed down by itstrading operation, but its profitability should be more defensivethan that of Yuhuang due to Shanghai Huayi's much strongerposition in the Shanghai market, and a higher contribution fromadvanced chemicals - that is less intensely competitive thancommodity chemicals.

The rating has also incorporated the financing and executionrisks for the US methanol project, which has just startedconstruction, and the resultant pressure on its credit profileduring construction. The rating also reflects vulnerability (as acommodity chemical producer) to the future price volatility ofraw material and end-products, including methanol in the future,as the company has committed to a large methanol project in theUS.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch ratings case for the issuerinclude:

- Utilisation rate for the China operations remains above 90%; US project to start operations in 2019 with 50% utilization

- Failure to secure the financing, or significant delay of the closing of the project loan for the US methanol project

- Fitch may revise the Positive Outlook back to Stable if the company does not meet the other positive guidelines set above.

LIQUIDITY

Improving Debt Structure: As with other private companies inChina, most of Yuhuang's debt is short-term, which accounted for62% of total debt at end-9M16. However, the company is optimizingits debt structure by refinancing its maturing short-term debtwith long-term debt, including domestic bond issuance. Thecompany used to rely heavily on bank loans, while increasinglymore debt has been issued out of the domestic bond market inrecent years. Most of the debt is at the holding company level.Most of the bank loans are not secured by assets, but ratherguaranteed by third parties. The percentage of secured loans hasalso declined in recent years. Secured bank loans only accountedfor 5% of total bank loans (4% of total debt) as of end-9M16.

Adequate Liquidity: The company has CNY1.0 billion inunrestricted cash as of end-9M16. It has short-term debt ofCNY5.9 billion. Fitch estimates its China operations couldgenerate positive FCF of around CNY730 million in the next 12months (4Q16-3Q17). The company has unutilised bank creditfacilities of CNY3.2 billion (excluding the debt facilities to besecured to finance the US project), and an available bondissuance quota of around CNY4.0 billion, which will be enough torefinance its maturing short-term debt. Future equity injectioninto the US project will be satisfied by the proposed US dollarnotes, and should therefore have no impact on the liquidity ofits China operations.

According to Bloomberg, the country's Chief Justice Zhou Qiangsaid at the National People's Congress on March 12 thatauthorities will improve the country's judicial system fordealing with bankruptcies in 2017 to support those goals.Bloomberg says Chinese authorities are devoting more resources totackle corporate restructurings and bankruptcies as bad debts atbanks soared to an 11-year high in 2016 and bond defaults morethan quadrupled in the period.

China is targeting growth of about 6.5 percent this year, anddealing with zombie companies is pivotal to the nation's effortsto reduce excess capacity, President Xi Jinping told partyleaders in February, Bloomberg relates citing a Xinhua report.Courts will tend to liquidate firms that clearly have no future,though restructurings will remain the preferred outcome forstressed companies in China, Gong Jiali, president of GuangdongHigher People's Court, said in an interview last week, Bloombergrelays.

"There is greater professionalism of the judiciary, greaterspecialism of judges in China's bankruptcy courts," EdwardMiddleton, head of restructuring for Asia Pacific at KPMG who hasabout 30 years of experience in the restructuring field,Bloomberg relays. Still, neither company owners nor creditors areused to the idea of taking advantage of bankruptcy processes,according to Mr. Middleton.

Chinese courts accepted a record of 5,665 bankruptcy filings in2016, up 54 percent from 2015, according to official dataobtained by Bloomberg. The potential size of China's distresseddebt and non-performing loan market may be worth as much as $3trillion, distressed fund operator ShoreVest Partners in a notethis month, relays Bloomberg.

Bloomberg notes that China has set up bankruptcy and liquidationdivisions at 73 courts so far to help work on insolvencies.Commercial bankruptcies in China are still small compared withthe U.S., where there was a 26 percent increase in filings to37,771 last year, Bloomberg discloses citing the AmericanBankruptcy Institute.

China's Supreme People's Court set up a website in August forcourts to release information on bankruptcy cases they areworking on and for creditors to register bankruptcy applications,Bloomberg recalls. In the province of Jiangsu, north of Shanghai,the judiciary is changing its appraisal system to encouragejudges to take up bankruptcy cases, according to Xu Qianfei,president of Jiangsu Higher People's Court, in a written reply toquestions, adds Bloomberg.

This final rating follows the receipt of documents conforming toinformation already received, and is in line with the expectedrating assigned on March 5, 2017.

KEY RATING DRIVERS

Significant Balance Sheet Improvements: Noble's ratio of workingcapital/total debt, including 50% of its perpetual securities,had improved significantly to a healthy 1.36x by end-2016, from0.96x at end-2015. This was consistent with Fitch expectations,as the company implemented a number of liquidity-strengtheningmeasures, including the sale of Noble America Energy Solutions(NES) and completion of a rights issue. This ratio is similar tothose of investment-grade rated peers.

Business Profile Remains Strong: Fitch believes Noble's businessprofile remains strong - given its global footprint and leadingposition in a number of key products in core regions. Returnshave declined, but annual tonnage volume shipped has remainedstable over the last two years at over 220 million tonnes,supporting its underlying business over the long term.

Return Improvement Uncertain: Noble's quarterly working-capitalreturn has been below Fitch 3% negative rating trigger since3Q15, and deteriorated further to an average of 0.7% in 2016.However, the weak EBITDA generation does not reflect Noble's true2016 return, as it is largely attributed to the sale of NES, atemporary increase in selling, administrative and operating (SAO)expenses due to headcount reduction and rationalisation andcapital constraints on business expansion given the company'sfocus on improving its balance sheet and liquidity. Adjusting formore typical SAO expenses and 11 months of NES's performanceprior to disposal, return on working capital is a higher 2%.

Fitch believes Noble may be able to deploy more capital togenerate returns in 2017 due to its improved liquidity at end-2016. However, it remains uncertain whether the company will beable to sustain high returns in the difficult operatingenvironment.

Negative Operating Cash Flow: Noble's cash flow from operations(CFO) has been negative since 2014, which breaches one of Fitch'snegative rating triggers. The main reason for negative CFO in2015-2016 was lower accounts payable, which Fitch believes wasdue to credit-related events in 2015 and 1Q16 that reduced vendorand bank credit lines. This effect was diminished in 2H16, whichwas evident in improved CFO to USD56 million in 4Q16n fromnegative USD486 million in 1Q16, helped by a USD226 millionaccounts payable increase, compared with falls in previousquarters.

Fitch does not expect a further decline in Noble's accountspayable in 2017, but it remains uncertain as to whether theimproved CFO on a quarterly basis in 2016 can be sustained into2017 and beyond, as it can be affected by the company's decisionto increase working capital to drive profitability.

Limited Secured Debt: Noble's secured debt as a percentage oftotal debt is low, at around 13% at end-2016. Noble's managementindicated that the company intends to use more borrowing-basedfacilities to finance working capital, in particular by issuingletters of credit, rather than using secured debt drawdowns. Asignificant increase in secured debt could lower the company'sunencumbered assets relative to unsecured debt, which may resultin its senior unsecured rating being notched down from its IDR.

DERIVATION SUMMARY

Noble's operational scope is in line with large internationaltraders with global reach, but its scale is smaller than that ofits investment-grade rated peers, such as Cargill Incorporated(A/Stable), Archer Daniels Midland Company (A/Stable) and BungeLimited (BBB/Stable). Its debt structure is heavier on short-termdebt compared with that of investment-grade rated peers given itsasset-light strategy. Noble's balance sheet is strong and in linewith investment-grade rated peers, but it has weaker profit-generation ability.

KEY ASSUMPTIONS

Fitch's key assumptions within Fitch ratings case for the issuerinclude:

- Sales volume to remain similar to 2016 levels. - Capex and business acquisitions of USD100 million a year.

RATING SENSITIVITIES

Developments that May, Individually or Collectively, Lead toPositive Rating Action:

- The company reverting to more longer-term and competitively priced funding on a sustained basis

Developments that May, Individually or Collectively, Lead toNegative Rating Action:

- Weakened business strength evident from lower fundingcapacity to support working-capital expansion over the cycle;sustained decline in tonnage volume that is more severe than industry performance; and evidence of a weaker risk managementprocess.

- Senior unsecured ratings might be notched down if there is insufficient coverage of unsecured debt by unencumbered assets.

LIQUIDITY

Noble's liquidity at end-2016 stood at US$2.0 billion andconsisted of US$1.1 billion of unrestricted cash and equivalentsand US$943 million of undrawn committed facilities. This comparedwith liquidity of only USD868 million at end-June 2016. Currentliquidity is equivalent to close to 1.3x inventory, which Fitchbelieves is sufficient to cover requirements arising fromreasonable commodity price increases.

The upgrade reflects timely servicing of debt in the nine monthsended February 2017.

The ratings reflect ATPL's working capital-intensive operationsand exposure to fluctuations in foreign exchange (forex) rates.These weaknesses are partially offset by the extensive experienceof its promoters in the leather industry and their financialsupport.

Key Rating Drivers & Detailed Description

Weaknesses

* Working capital-intensive operations: Long processing cycle(60-75 days) and lengthy repayment schedule owing to high transitperiod have resulted in substantial inventory and receivables inthe past three years. Gross current assets have been in the 571-613 days range in the past.

* Exposure to fluctuations in forex rates: Since majority ofrevenue comes from exports, the company remains exposed toeconomic and regulatory changes in the global markets. This couldlead to lower pricing power and hence modest profitability.

Strength

* Extensive experience of promoters in the leather industry: Thecompany is managed by the third generation of promoters - Mr.Mahmud Alam, Mr. Afroz Alam, Mr. Aftab Alam, and Mr. Shadab Alam.In the past three decades, the promoters have acquired extensivemarket knowledge and established strong relationship with clientsand suppliers. The company has carved a niche for itself in thebuffalo hide-based leather market.

Outlook: Stable

CRISIL believes ATPL will continue to benefit over the mediumterm from the extensive experience of its promoters. However,liquidity will remain constrained by long working capital cycledespite funding from promoters. The outlook may be revised to'Positive' in case of substantial growth in turnover with stableprofitability and controlled working capital cycle. The outlookmay be revised to 'Negative' if liquidity deteriorates because oflarge working capital requirement and significantly low accrual.

Incorporated in the 1920s and promoted by Mr. Maqbul Alam, ATPLmanufactures leather furniture and also exports hides andstitched leather to the UK, Germany, Poland, Hungary, China,South Africa, and Australia. It has two tanneries.

Profit after tax (PAT) was INR35 lakh on net sales of INR37.98crore for fiscal 2016, against a PAT of INR54 lakh on net salesof INR37.02 crore for fiscal 2015.

AMARPARKASH RICE: CRISIL Reaffirms D Rating on INR9.5MM Loan------------------------------------------------------------CRISIL has been consistently following up with Amarparkash RiceExports (P) Ltd (AREPL) for getting information. CRISIL requestedcooperation and information from the issuer through its lettersand emails dated February 17, 2017, February 7, 2017, and January19, 2017 among others, apart from telephonic communication.However, the issuer has continued to be non-cooperative.

"The investors, lenders and all other market participants shouldexercise due caution while using the rating assigned/reviewedwith the suffix 'ISSUER NOT COOPERATING'. These ratings lack aforward looking component as it is arrived at without anymanagement interaction and is based on best available or limitedor dated information on the company."

* Delays in servicing term debt due to poor liquidity: AREPL hasdelayed its repayments towards bank loans, as it booked nilrevenue in fiscal 2017. Further delay in recommencement ofoperations will result in continued postponement of its debtrepayment obligation.

The upgrade reflects expected improvement in revenue by 60-65% infiscal 2017 on account of healthy offtake in the global market.Profitability too is expected to improve substantially because ofbetter absorption of fixed cost. This is expected to result insufficient cash accrual over the medium term, which will besufficient to meet debt obligation of INR1.26 crore over thisperiod. The rating also factors in unsecured loans of INR3.08crore as on March 31, 2016, providing adequate liquidity.

Key Rating Drivers & Detailed Description

Weaknesses

* Modest scale of operations: Net sales were INR4.3 crore infiscal 2016. Though sales are expected to improve by 60-65% infiscal 2017, operations remain modest. The market is fragmentedwith more than half of it comprising regional brands, and a fewnational brands and the unorganised segment. Hence, the modestscale of operations restricts the ability to negotiate withcustomers or suppliers.

* Weak financial risk profile: Both capital structure and debtprotection metrics are expected to remain weak in fiscal 2017.The networth was modest at INR1.1 crore as on March 31, 2016,against INR2.4 crore a year earlier. Interest coverage ratio islikely to remain average at around 2 times in fiscal 2017.

Strength

* Extensive experience the promoters: The promoters, members ofthe Daga family, have an experience of over three decades in thetea trading business. Backed by this, growth is expected inrevenue.

Outlook: Stable

CRISIL believes BAPL will continue to benefit from the extensiveindustry experience of its promoters. The outlook may be revisedto 'Positive' in case of a significant increase in scale ofoperations and operating margin, or considerable improvement inthe networth driven by equity infusion, leading to a bettercapital structure. The outlook may be revised to 'Negative' ifcash accrual is lower than expected, or if the financial riskprofile weakens further, most likely due to an increase inworking capital requirement or large, debt-funded capitalexpenditure.

BAPL was incorporated in November 2011; operations are managed byMr. Suraj Kumar Daga and his son, Mr. Gaurav Daga. The companymanufactures tea extracts and tea pre-mixes at its facility inWada, Maharashtra.

Net loss was INR1.3 crore on net sales of INR4.3 crore in fiscal2016, against net loss of INR1.1 crore on net sales of INR1.5crore, in fiscal 2015.

The rating reflects the firm's modest scale of operationsexpected, and exposure to demand risk and intense competition.These weaknesses are partially offset by the project's-the firmis setting up a corrugated boxes facility in Jammu-low fundingand implementation risks, and the promoters' extensiveexperience.

Key Rating Drivers & Detailed Description

Weaknesses

*Expected small scale of operations: With commercial productionset to begin only in April 2017, the scale of operations shouldremain small over the medium term. Revenue will likely be modestaround INR17 crore in fiscal 2018.

*Exposure to demand risk and intense competition: Exposure tointense competition and, therefore, to demand risk whenproduction begins, is likely to persist over the medium term,keeping business risk profile under pressure.

Strengths

*Longstanding experience of promoters in the packaging industry:Benefits from the 15 years' experience of the promoters, Mr.Nitin Jain and Mr. Anuj Jain, and their healthy relations withcustomers and suppliers are likely to continue.

*Moderate funding and implementation risks: Funding risk is lowon the ongoing project of INR6.44 crore, funded at a debt-to-equity ratio of 8:3. The promoters have already brought in around72% of their contribution in the form of share capital, while theterm loan is to be fully disbursed by March 2017. Implementationrisk is also low, given the promoters' experience in thepackaging industry.

Outlook: Stable

CRISIL believes CII will continue to benefit from its promoters'extensive experience in the packaging industry. The outlook maybe revised to 'Positive' if timely commercialisation ofproduction, significant ramp-up in revenue and profitability, andprudent working capital management strengthen credit metrics.Conversely, the outlook may be revised to 'Negative' if delay instabilisation of operations constrains profitability andliquidity.

CII is a partnership firm set up in 2016 by Mr. Nitin Jain andhis brother, Mr. Anuj Jain. The firm is setting up a corrugatedbox facility at SIDCO Complex, Bari Brahmana, Jammu. Commercialoperations are expected to start from April 2017.

CRISIL has treated unsecured loans of INR6.8 crore as neitherdebt nor equity as the same are from promoters, have no interestobligations and are expected to remain in the business over thelong term.

Key Rating Drivers & Detailed Description

Weaknesses

* Weak financial risk profile: Financial risk profile remainsconstrained by modest networth of INR15.12 crore, and high totaloutside liabilities to adjusted net worth (TOLANW) ratio of over8.01 times as on March 31, 2016. Interest coverage is subdued at1.7 times, but should improve with improvement in profitability.The liquidity is also stretched with expected cash accruals ofINR12-16 crore against repayment obligations of around INR13.8crore over medium term. The promoters are expected to support theliquidity in the form of fund infusion.

* Exposure to risks related to competition in the automobiledealership business: Scale of operations is modest because oflimited area of operations and competition from dealers of otherprincipals. Also, given the nature of business, operations andprofitability depend on the principal.

Strength

* Promoter's extensive experience and established relationshipwith principal: FACPL is part of the Fortpoint group. Thepromoters have been in the auto dealership business for the past25 years. Their extensive experience has helped FACPL withstandeconomic cycles.

Outlook: Stable

CRISIL believes that FACPL will continue to benefit from itspromoters extensive industry experience and establishedassociation with MSIL. The outlook may be revised to 'Positive'if the financial risk profile and liquidity improves due tohigher-than-expected cash accrual, fresh sizable fund infusion bypromoters along with efficient working capital management.Conversely, the outlook may be revised to 'Negative' if thefinancial risk profile, particularly its liquidity is constraineddue to lower-than-expected cash accrual or large working capitalrequirements or any large, debt-funded capital expenditureprogramme.

Incorporated in 2001, FACPL is an authorised dealer for MSIL forsale of its passenger cars in Mumbai. FCAPL operates through twoshowrooms and three service centres across Mumbai. The company ispromoted and managed by Mr. Sundeep Bafna and family.

For fiscal 2016, FACPL's profit after tax (PAT) was INR2.67 croreon net sales of INR286.9 crore, against a PAT of INR1.25 crore onnet sales of INR222.6 crore for fiscal 2015.

The rating reflects the firm's small scale of, and workingcapital-intensive, operations, and below-average financial riskprofile because of weak debt protection metrics. These weaknessesare partially offset by extensive experience of proprietor andhis funding support.

Analytical Approach

Unsecured loans of INR6.81 crore from proprietor's family membershave been treated as neither debt nor equity as these areinterest-free and will remain in business over the medium term.

Key Rating Drivers & Detailed Description

Weaknesses

* Below-average financial risk profile: Interest coverage and netcash accrual to total debt ratios were 1.01 times and 0.003 time,respectively, due to low profitability of 2.7% for fiscal 2016 onaccount of trading nature of business. Networth was also modestat INR7.7 crore on March 31, 2016.

* Small scale of, and working capital-intensive, operations:Sales were around INR23.8 crore in fiscal 2016. Moreover, grosscurrent assets were high at over 394 days as on March 31, 2016,driven by substantial inventory of 177 days and receivables of212 days.

Strength

* Extensive experience of proprietor in the polymers tradingindustry: Presence of more than a decade in the trading businesshas enabled the proprietor to develop healthy relationship withcustomers and suppliers.Outlook: Stable

CRISIL believes HPI will continue to benefit over the medium termfrom the extensive experience of its proprietor in the polymertrading industry. The outlook may be revised to 'Positive' incase of a significant and sustained improvement in revenue andoperating margins, while improving capital structure and workingcapital management. The outlook may be revised to 'Negative' ifsharp decline in revenue or margins, further stretch in workingcapital cycle, or large, debt-funded capital expenditure resultsin deterioration in financial risk profile.

Set up in 2015 as a proprietorship concern by Mr. Nishant Kumar,HPI trades in PET granules and bottles, master batches,chemicals, mono cartons, and corrugated boxes that are majorlyused in the pharmaceutical industry. Commercial operations beganin April 2015.

Book profit was INR0.28 crore on sales of INR23.8 crore in fiscal2016.

The upgrade reflects an improvement in the business risk profilemarked by increase in scale of operations. Operating income grewby 14.3% to INR40.7 crore in fiscal 2016 vis-a-vis INR34.9 crorein the previous fiscal year and is expected to grow steadily overthe medium term supported by healthy demand in the domesticmarket. Improved operating performance has resulted in healthycash accrual of INR2.45 crores in fiscal 2016 from INR1.45 croresin fiscal 2015; cash accrual is expected to be sustained atINR2.5-3.5 cores over the medium term. The rating upgrade alsofactors in the improvement in financial risk profile marked bycomfortable debt protection metrics; interest coverage and netcash accrual to total debt (NCATD) ratios improved to 2.13 timesand 0.18 times respectively during fiscal 2016 compared to 1.81times and 0.10 times respectively in the previous fiscal year.However, exposure to its group companies continues to remain highthereby constraining its financial risk profile. Any incrementalfund support to, or investments in, group entities will remain akey monitorable over this period.

The ratings continue to reflect working capital-intensive natureof operations and susceptibility of the operating margin tovolatility in foreign exchange rates. These rating weaknesses arepartially offset by a moderate financial risk profile because ofa comfortable gearing and adequate debt protection metrics,extensive experience of the promoters in the granite industry,and an established market position.

Key Rating Drivers & Detailed Description

Weakness

* Working capital-intensive operations: Gross current assets were592 days as on March 31, 2016, driven by a high inventory andloans and advances extended to group companies. The bank line wasutilised at an average of 98% during the 12 months throughDecember 2016.

* Promoters' experience in granite industry, and establishedmarket position: The promoters of the IGPL have close to fourdecades of experience in the granite industry. IGPL has well-established relationships with customers in over 60 exportcountries.

Outlook: Stable

CRISIL believes IGPL will continue to benefit from theestablished track record of its promoters in the quarry industryand its diversified end-user profile. The outlook may be revisedto 'Positive' in case of improvement in the working capital cyclealong with a sustained increase in profitability margins andscale of operations. The outlook may be revised to 'Negative' incase of lower-than-anticipated cash accrual, larger-than-expecteddebt-funded capex, or a stretched working capital cycle, leadingto deterioration in the financial risk profile, particularlyliquidity.

IGPL was incorporated in Chennai in 1986, promoted by Mr. RVeeramani. The company undertakes quarrying and processing ofgranites and monuments.3

* Experience of partners: JSKC benefits from the partners'decade-long experience and healthy relationships with customersand suppliers in Agro business.Outlook: Stable

CRISIL believes JSKC will maintain the business risk profile overthe medium term backed by partner's experience. The outlook maybe revised to 'Positive' if substantial increase in revenue,profitability and equity infusion strengthens financial riskprofile. Conversely, the outlook may be revised to 'Negative' iflower-than-expected revenue and profitability, or stretchedworking capital cycle weakens financial risk profile.

Established in 2015 as a partnership firm, JSKC trades in pulses.The firm, based in Raipur, Chhattisgarh, is managed by Mr.Priyanshu Agrawal and Mr. Satyad Agrawal.

JMT AUTO: CRISIL Lowers Rating on INR67MM Cash Loan to B+---------------------------------------------------------CRISIL has been seeking information and a discussion with themanagement of JMT Auto Ltd since January 2016. Despite severalemails and calls, the company has not submitted any information.CRISIL had, through a letter dated February 24, 2017, informedthe company of the extant guidelines and requested forcooperation. The issuer, however, remains non-cooperative.

Term Loan 55 CRISIL B+/Negative (Issuer not Cooperating and Downgraded from 'CRISIL BB'; Removed from 'Rating Watch with Negative Implications')

Working Capital 8 CRISIL B+/Negative (Issuer Term Loan not Cooperating and Downgraded from 'CRISIL BB'; Removed from 'Rating Watch with Negative Implications')

The investors, lenders, and all other market participants shouldexercise due caution while using the rating assigned/reviewedwith the suffix 'Issuer Not Cooperating'. These ratings lack aforward-looking component as it is arrived at without anymanagement interaction and is based on best available or limitedor dated information on the company.

Detailed Rationale

CRISIL has downgraded its ratings on the bank facilities of JMTLto 'CRISIL B+/Negative/CRISIL A4' from 'CRISIL BB/CRISIL A4+' andhas removed it from 'Rating watch with negative implications'.

The downgrade reflects CRISIL's inability in maintaining theratings of JMTL at 'CRISIL BB/CRISIL A4+' due to inadequateinformation and lack of management cooperation, therebyrestricting CRISIL from taking a forward looking view on thecredit quality of the entity. JMTL scores low ('L') onavailability of past information. Though the company is listed onthe stock exchanges, CRISIL does not have access toquarterly/half-yearly information of its key subsidiaries, whichhave large debt exposure. It scores low ('L') on futureinformation due to unavailability of management's public statedstance on future expectations, strategic decisions, and capitalexpenditure (capex). It also scores low ('L') on the stabilityattributes listed in CRISIL's criteria for surveillance ofratings of non-cooperative issuers. On the basis of theaforementioned, CRISIL believes the available information isinconsistent with a CRISIL BB category rating, leading CRISIL todowngrade the rating to 'CRISIL B+' and has removed it fromratings watch and assigned a 'Negative' outlook.

Financial risk profile has deteriorated significantly postacquisition of REGE Holding GmbH (REGE) and Amtek ComponentsSweden. Consolidated gearing was high at 7 times as on March 31,2016, and net cash accrual to total debt ratio weak at 0.07 timefor fiscal 2016.

* Segmental and customer concentrations in revenue profile:Around 85% of revenue comes from the automobile sector, where theprimary customers are commercial vehicle (CV) and heavy earth-moving machinery (HEMM) manufacturers. The CV industry iscyclical as demand is driven by growth in industrial production,increase in freight movement, change in freight rates, and fuelprices.

* Working capital-intensive operations: Gross current assets were229 days as of March 2016 due to sizeable inventory of 102 daysgiven large product range, lead time required for manufacturing,and slowing down of demand from original equipment manufacturers.

Strengths

* Extensive experience of promoters in the automotive componentsindustry

* Presence of around three decades in the automotive componentsindustry has enabled the promoters to establish strongrelationships with various OEMs in different segments, such asCV, HEMM, and railways, both in India and overseas.

Outlook: Negative

CRISIL believes JMTL's financial risk profile, particularlyliquidity, is likely to deteriorate over the medium term due tosignificant maturing debt obligation while cash accrual remainssubdued. The ratings may be downgraded if further weakening offinancial risk profile due to decline in operating income orprofitability leads to lower cash accrual, or if working capitalcycle is stretched or there is sizeable debt-funded capex. Theoutlook may be revised to 'Stable' if liquidity improvessignificantly due to sufficient cash accrual against debtobligation.

JMTL (formerly, Jamshedpur Metal Treat) was incorporated as aprivate limited company in April 1987 to take over the businessof Metal Treat Company, an ancillary of Tata Motors Ltd ('CRISILAA/Positive/CRISIL A1+') that manufactures auto components. Itwas reconstituted as a public limited company in April 1992 andwas acquired by AAL in June 29, 2013, which now holds 70.74%stake in it. The company acquired REGE and Amtek ComponentsSweden through Amtek Machining systems Pte Ltd in fiscal 2016. Ithas also formed a joint venture, Amtek Riken Castings Pvt Ltd.

For fiscal 2016, JMTL's profit after tax (PAT) was INR4.86 croreon operating income of INR336 crore, against INR11.28 crore andINR430.25 crore in the previous fiscal. In the nine months endedDecember 31, 2016, total income and PAT were INR228.06 crore andINR4.24 crore, respectively, against INR248.74 crore and INR1.65crore, respectively, in the corresponding period of the previousfiscal.

AAL had a net loss of INR660.84 crore and operating income ofINR1498.54 crore in fiscal 2016, against a net loss of INR119.88crore and operating income of INR3740.81 crore in fiscal 2015. Inthe nine months ended December 31, 2016, total income and netloss were at INR1507.53 crore and INR1316.42 crore, respectively.

Long Term Loan 1.22 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable')

The upgrade reflects CRISIL's belief that KWC's business riskprofile will continue to improve over the medium term, supportedby healthy growth in revenues and improvement in operatingmargins. KWC's revenues grew to INR30.77 crore in fiscal 2016from INR17.19 crore in the previous fiscal, supported byincremental revenues from a new showroom opened at Angamaly,Kerala, in July 2015. Revenue is expected to grow at a healthyrate over the medium term supported by incremental revenues fromtwo new showrooms, expected to be opened by August 2017, atVadanappally and Thrissur, Kerala, while operating margins areexpected to improve supported by higher proportion of sales fromthe kids wear and women's wear segment.

The rating continues to reflect an average financial risk profilebecause of a modest net worth, moderate gearing, and weak debtprotection metrics. The rating also factors in exposure tointense competition and geographic concentration in revenue.These weaknesses are partially offset by the extensive experienceof the promoters in the apparel retail industry.

Key Rating Drivers & Detailed Description

Weaknesses

* Small scale of operations, exposure to intense competition inthe retail industry, and geographic concentration in revenue: Thefirm's revenue has grown substantially, from INR 17.19 crores infiscal 2015 to INR 30.77 crores in fiscal 2016. The increase wassupported by incremental revenues from the new showroom atAngamaly, opened in July 2016. Though revenues are expected togrow at a healthy rate over the medium term, supported byincremental revenues from two new showrooms, expected to beopened by August 2017 at Vadanappally and Thrissur, scale ofoperations is expected to remain small.

Also, the firm is exposed to intense competition as the retailbusiness is highly fragmented with numerous small and midsizedfirms. This is likely to constrain pricing flexibility andoperating profitability of the firm.

* Average financial risk profile: Networth increased to INR5.92crore as on March 31, 2016, up from INR3.77 crore a year earlier.The networth is expected to improve to INR6.5-7 crore over themedium term. Gearing was moderate at 1.47 times as on this date,and is expected to improve to around 1.2 times over the mediumterm. Debt protection metrics are weak; interest coverage ratiowas 1.63 times and net cash accrual to total debt ratio 0.07time, in fiscal 2016. The debt protection metrics are expected toimprove over the medium term.

Strength

* Extensive industry experience of the promoters: The promotershave an experience of over two decades in the apparel retailindustry, and are successfully running apparel retail stores inDubai. This experience has enabled them to develop a strongrelationship with suppliers, thus helping in the procurement ofgood quality raw material at lower prices. The promotersextensive experience will continue to help the firm in thefuture.

Outlook: Stable

CRISIL believes KWC will continue to benefit from the extensiveindustry experience of its promoters. The outlook may be revisedto 'Positive' if a significant increase in scale of operationsand efficient working capital management lead to substantiallyhigher cash accrual. The outlook may be revised to 'Negative' ifa stretched working capital cycle, or any large, debt-fundedcapital expenditure weakens the financial risk profile,particularly liquidity.

KWC, incorporated in 2009, is promoted Mr. K A Niyas and hisfamily, who have been in this line of business for over twodecades. It is Kerala's largest wedding apparel retail firm,offering over 10,000 branded products. The firm has threeoperational retail stores in Kerala.

The rating continues to reflect the firm's working capital-intensive operations, weak financial risk profile because of highgearing and small net worth, and modest scale of operations.These weaknesses are partially offset by the extensive experienceof KI's promoters in foam trading and manufacturing industry.

Key Rating Drivers & Detailed Description

Weaknesses

* Working capital-intensive operations: Operations are workingcapital-intensive, reflected in gross current assets of 251 daysas on March 31, 2016, due to large receivables (121 days) andinventory (112 days). High credit of 60-90 days to customers andyear-end sales (peak season is during January-May) have keptreceivables level high. Though payables of 109 days help bridgefunding gap, operations will remain working capital-intensiveover the medium term.

* High gearing because of small networth: Gearing was 2.22 timesas on March 31, 2016, because of high reliance on debt to fundworking capital requirement and capex. Gearing is likely toremain at a similar level over the medium term.

* Modest scale of operations and low profitability: KI's scale ofoperations is modest, as reflected in its sales of around INR21.5crore in 2015-16. The same has increased at a CAGR of 18 per centover the past 3 years ending March, 2016. In spite of aconsistent increase over the years, its scale of operationsremains modest compared to other players in the industry. This islargely on account of high competition and relatively smallcapacity. As a result, KI's small scale of operations limits itsbargaining power with suppliers as well as customers.

Strength

* Proprietor's extensive experience in the foam industry:Proprietor has been in this business for over 15 years now, whichhas helped the firm in terms of supply chain management. The Firmis engaged into manufacturing of PU Foams and its manufacturingfacility is located at Noida, Uttar Pradesh, along with tradingof chemicals and fabrics. Established position of proprietor inthe industry has helped the firm in terms of its assured demand-supply chain. Over the years, proprietor has successfullyestablished a procurement and distribution network that has ledto ready set of distributors and suppliers for the firm.Outlook: Stable

CRISIL believes KI will continue to benefit over the medium termfrom promoters' extensive industry experience. However, financialrisk profile will remain constrained due to planned debt-fundedcapital expenditure. The outlook may be revised to 'Positive' ifscale of operations and profitability improve substantially andfund infusion to meet debt obligation is timely, leading to abetter financial risk profile, particularly liquidity.Conversely, the outlook may be revised to 'Negative' if lower-than-expected revenue growth or profitability, or lack of timelyfunding support leads to pressure on liquidity.

Based in Noida, Uttar Pradesh, KI was established as aproprietorship firm in 2000 by Mr. Vijay Manchanda. The firmmanufactures PU foams and matrices and also trades in industrialchemicals and fabrics.

The downgrade reflects delays in servicing instalments on termloan on account of weak liquidity. Also, collection efficiencyhas been significantly affected by demonetisation.

Key Rating Drivers & Detailed Description

Weaknesses

* Weak liquidityDelays in collection of receivables from microfinance borrowerspost demonetisation led to stretched liquidity and hence delaysin servicing debt.

* Modest scale of operations and geographical concentrationThe society had a portfolio of INR2.5 crore as on March 31, 2016,which is small compared to CRISIL-rated microfinance institutions(MFIs). Also, operations are confined only to 30 village units inAlappuzha, Kerala, which exposes it to local, social, andpolitical issues.

*Modest capital positionNetworth was small at INR0.2 crore and gearing high at 10.3 timesas on March 31, 2016. The society largely depends on internalaccrual and grants to implement microfinance and otherdevelopmental activities. Furthermore, surplus is low, resultingin minimal accretion to corpus. Capital position will remainsubdued over the medium term.

*Exposure to risks inherent in the microfinance segmentThe microfinance sector is susceptible to regulatory andlegislative risks. Promulgation of the ordinance on MFIs by theGovernment of Andhra Pradesh demonstrated the vulnerability ofMFIs to regulatory and legislative risks, and triggered a chainof events that adversely impacted the MFI business model byimpairing growth, asset quality, operating surplus, and solvency.Such institutions lend to the poor and downtrodden sections ofsociety, and will therefore remain exposed to socially sensitivefactors such as high interest rates, and, consequently, totighter regulations and legislation.

Strength

*Strong track record in area of operationsKVS has been operating for more than two decades and hasundertaken various developmental activities for the betterment offarmers, agricultural labourers, women and children, fishermen,and disabled villagers in Kuttanadu, Alappuzha. So far, it hasformed about 840 women self-help groups, of which 665 were linkedto 8 banks for various activities. It provides services tocommercial banks for their microfinance operations by assistingthem in group formation, disbursement, and collection of loans.

KVS is a non-profitmaking organisation in Alappuzha and ismanaged by Fr. Thomas Peelianickal. The organisation wasregistered in 1979 and was taken over by the current managementin 1993. The society is engaged in the microfinance business onthe self-help model and also helps National Bank For Agriculture& Rural Development (NABARD) form joint liability groups to whichit lends. KVS earns a fee for the service from NABARD.

For fiscal 2016, surplus was INR3 lakh on a total income of INR38lakh, against a surplus of INR0.9 lakh on a total income of INR30lakh for the previous year.

The ratings reflect a modest scale, and working capital intensivenature, of operations in the thermal engineering segment, subduedoperating profitability, and below-average debt protectionmetrics. These rating weaknesses are mitigated by the extensiveindustry experience of the promoter and a moderate capitalstructure.

Key Rating Drivers & Detailed Description

Weaknesses

* Modest scale of operations and subdued operating profitability:Revenue was around INR26.9 crore in fiscal 2016, declining fromINR41.6 crore in the previous fiscal. Decline in revenue amidhigh fixed costs led to a significant reduction in operatingprofitability. Although profitability is expected to improve infiscal 2017 on the back of modest revenue growth and controlledfixed costs, the scale will remain modest.

* Working capital-intensive operations: Gross current assets werehigh, at 287 days as on March 31, 2016, driven by a moderatework-in-progress inventory, large receivables, and sizeablemargin money deposits.

* Below-average debt protection metrics: The interest coverageratio was below 1 time in fiscal 2016, and is expected to improveto just over 1.5 times in fiscal 2017.

Strengths

* Extensive industry experience of the promoter: The keypromoter, Mr. K V Kartha, has over 25 years of experience in theengineering industry and has developed a strong relationship withcustomers and suppliers.

* Moderate capital structure: The gearing was low, at 0.93 timeas on March 31, 2016, because of a moderate networth of INR11.6crore and the absence of any major debt-funded capitalexpenditure (capex).

Outlook: Stable

CRISIL believes MEPL will continue to benefit from the extensiveindustry experience of its promoter. The outlook may be revisedto 'Positive' in case of significant and sustained improvement inrevenue and profitability, leading sizeable cash accrual. Theoutlook may be revised 'Negative' if the financial risk profile,particularly liquidity, weakens because of low cash accrual, astretched working capital cycle, or any debt-funded capex.

MEPL had a net loss of INR77 lakh on revenue of INR26.97 crore infiscal 2016, against a net profit of INR4.41 lakh on revenue ofINR41.67 crore in fiscal 2015.MEPL, established in 1998 andpromoted by Mr. K V Kartha, designs, manufactures and installsenergy-saving projects, heating and cooling systems, andequipment. Its manufacturing facility is in Pune, Maharashtra.Helix Investment Company, a private equity firm, acquired a36.36% stake in the company in 2012.

MEPL had a net loss of INR77 lakh on revenue of INR26.97 crore infiscal 2016, against a net profit of INR4.41 lakh on revenue ofINR41.67 crore in fiscal 2015.

The rating continues to reflect a modest scale of operations inthe real estate industry, customer concentration in revenue, andweak debt protection metrics. These weaknesses are partiallyoffset by the extensive entrepreneurial experience of thepromoters and the favourable location of the warehouse.

Key Rating Drivers & Detailed Description

Weaknesses

* Modest scale of operations and customer concentration inrevenue: Revenue was around INR2.63 crore in fiscal 2016, againstINR2.31 crore in the previous fiscal. The company derives leaserental income from two properties in Chennai, leading to customerand geographic concentration in revenue.

* Extensive entrepreneurial experience of the promoters andfavourable location of the properties: MMG is part of theChennai-based Gupta group of companies, primarily involved inexport of human hair and sandalwood. Mr. M M Gupta, the promoter,has over four decades of entrepreneurial experience. Also, thecompany has properties at favourable locations in Chennai withreputed tenants and stable cash flows.

Outlook: Stable

CRISIL believes MMG will continue to benefit from the extensiveexperience of its promoters and need-based funding support fromthem. The outlook may be revised to 'Positive' if an increase incash accrual because of healthy occupancy rate improves thefinancial risk profile. The outlook may be revised to 'Negative'if any large, debt-funded capital expenditure further weakens thefinancial risk profile.

MMG, incorporated in 2004, is part of the Chennai-based Guptagroup, promoted by Mr. M M Gupta. The company leases warehouseand commercial spaces in Chennai.

Profit after tax was INR0.29 core on net sales of INR2.63 crorefor fiscal 2016, against INR0.02 crore and INR2.34 crore,respectively, in fiscal 2015.

Operating income is likely to grow significantly in fiscal 2017to around INR43 crore (INR35 crore for the 10 months throughJanuary 2017) from INR22.61 crore in the previous fiscal becauseof better realisations following the revival in the riceindustry. Operating margin is expected at 2.5-3.0% over themedium term and will remain susceptible to volatility in rawmaterial prices.

With a stretched working capital cycle because of high stockingrequirement, debt remained large, leading to a high total outsideliabilities to tangible networth (TOLTNW) ratio and below-averagedebt protection metrics. However, absence of significant capitalexpenditure (capex) and rising net cash accrual should lead toimprovement in the financial risk profile over the medium term.Sufficient funds ensured moderate reliance on bank borrowings(averaged 64% for the 12 months through January 2016), despiteworking capital intensive operations. Liquidity is supported byunsecured loans (INR3.64 crore as on March 31, 2016) from thepartners.

Key Rating Drivers & Detailed Description

Weaknesses

* Weak financial risk profile:The net worth was small at INR2.4 crore and the TOLTNW ratio highat 5.16 times as on March 31, 2016. Debt protection metrics werebelow-average: the interest coverage ratio was 1.57 times, andthe net cash accrual to adjusted debt ratio 0.05 time, in fiscal2016. The small net worth significantly weakens the financialflexibility to raise additional debt. While the financial metricswill improve in the absence of debt-funded capex, they willremain weak because of large working capital requirement.

* Small scale of operationsThe company is a small player in the fragmented domestic riceindustry with total milling and sorting capacity of 7 tonne perhour. The small scale exposes it to competitive pressures,leading to limited bargaining power with customers. This, alongwith constrained economies of scale, has resulted in lowprofitability.

* Working capital-intensive operationsGross current assets were 177 days as on March 31, 2016. Theincremental working capital requirement is high in this businessas operations involve large inventory, resulting in substantialshort-term debt. With the expected ramp-up in scale ofoperations, improvement in working capital cycle will be a ratingsensitivity factor.

Strength* Extensive industry experience of the partnersThe partners have an experience of more than a decade in the riceindustry. This has enabled them to establish a sound relationshipwith customers, resulting in repeated orders from various clientsand the addition of customers.Outlook: Stable

CRISIL believes MBRM will continue to benefit from the extensiveindustry experience of its partners. The outlook may be revisedto 'Positive' in case of a substantial increase in revenue andprofitability, leading to a rise in net cash accrual, while theworking capital cycle improves, or if the capital structure anddebt protection metrics are significantly better, strengtheningthe financial risk profile. The outlook may be revised to'Negative' if low profitability leads to muted cash accrual, ifworking capital management is weak, or the financial risk profiledeteriorates due to large, debt-funded capex.

MBRM was set up as a partnership firm by Mr. Pawan Kumar Goyaland Mr. Joginder Pal in 2006. The firm mills and processesbasmati rice at its facility in Cheeka, Haryana.

The rating reflects a modest scale of operations, susceptibilityof profitability to volatility in cotton prices, and a weakfinancial risk because of high gearing and low debt protectionmetrics. These rating weaknesses are partially offset by theextensive experience of promoters in the cotton industry.

Key Rating Drivers & Detailed Description

Weaknesses

* Modest scale of operations in the highly competitive cottonindustryThe firm started operations in 2007 and is growing at moderaterate. The scale of operations is expected to increase over themedium term. The entry barriers are low on account of limitedcapital and technology intensity and little differentiation inthe end product, leading to intense competition.

* Susceptibility of profitability to volatility in cotton pricesThe Government of India fixes the MSP (minimum support price) foreach crop every year. When the price of any variety of cotton islower than the MSP, the Cotton Corporation of India and NationalAgricultural Co-operative Marketing Federation resort toimmediate market intervention and purchase cotton at the MSPwithout any quantitative limits.

* Weak financial risk profileThe gearing is expected to be high 2.60 times as on March 31,2016 primarily due to a small net worth of INR2.6 crore. There isno long-term loan. The debt protection metrics are weak withinterest coverage and net cash accrual to total debt ratios at1.4 times and 0.04 time, respectively, in fiscal 2016.

Strength

* Extensive industry experience of the promotersThe promoters have around a decade of experience in the cottonginning industry. This has given them an understanding of thedynamics of the local market, and enabled them to establishrelationships with customers and suppliers.

Outlook: Stable

CRISIL believes MOM will continue to benefit from the extensiveindustry experience of its promoters. The outlook may be revisedto 'Positive' in case of substantial revenue growth whileprofitability and the capital structure improve. The outlook maybe revised to 'Negative' in case of a considerable decline inrevenue and profitability, deterioration in working capitalmanagement, or large, debt-funded capital expenditure, weakeningthe financial risk profile, particularly liquidity.

MOM was established as a partnership firm in 2007 by members ofthe Agarwal family, who also manage operations. The promotershave an experience more than two decades in cotton ginning andalso have a farming business in Warangal, Telangana. MOM carriesout cotton ginning and oil extraction work at its facility inWarangal.

In fiscal 2016, net profit was INR0.25 crore on total income ofINR142 crore, against net pofit of INR0.23 crore on total incomeof INR99.7 crore in the previous fiscal.

The rating reflects the firm's modest scale of operations in theintensely competitive plywood trading industry, large workingcapital requirement, and below-average financial risk profile.These weaknesses are partially offset by the extensive experienceof its promoters and established supplier relationship.

Key Rating Drivers & Detailed Description

Weaknesses

* Modest scale of operations in competitive segment: With anestimated revenue of INR12.5 crore in fiscal 2017, scale remainssmall in the competitive plywood trading industry that has lowentry barrier due to minimal capital requirement.

* Large working capital requirement: Gross current assets areestimated around 165 days as on March 31, 2017, due to highreceivables (approx. 80 days) and sizeable inventory (approx. 3months).

* Below-average financial risk profile: Networth is estimated tobe modest at INR1.18 crore and gearing moderate at 1.20 times ason March 31, 2017. However, gearing is likely to deteriorate toover 2.0 times because of incremental working capital debt tofund ramp-up in operations. Debt protection metrics are likely tobe muted, with net cash accrual to total debt and interestcoverage ratios of 0.08 time and 2.45 times, respectively, forfiscal 2017.

Strengths

* Extensive experience of promoters and established supplierrelationship: Presence of over four decades in the plywoodtrading segment has enabled the promoters to establish strongrelationship with suppliers.

Outlook: Stable

CRISIL believes MP will continue to benefit over the medium termfrom the extensive experience of its promoters and establishedrelationship with key customers and suppliers. The outlook may berevised to 'Positive' if significant ramp-up in operations andbetter profitability lead to higher-than-expected cash accrual.The outlook may be revised to 'Negative' in case of a decline inrevenue or profitability, or if large, debt-funded capitalexpenditure or deterioration in working capital managementaffects financial risk profile.

Set up in 1978 in Chennai as a partnership firm by Mr. Ashraf, MPtrades in plywood and timber. Operations are managed by Mr.Ashraf and his son Mr.Mishad Ashraf.

For fiscal 2016, profit after tax (PAT) was INR11.8 lakh on atotal income of INR5.99 crore, against a PAT of INR15.17 lakh ona total income of INR5.30 crore for the previous fiscal.

The rating reflects MSSKL's weak financial risk profile, withhigh total outside liabilities to adjusted networth ratio andsubdued debt protection metrics on account of its large workingcapital requirement. The rating also factors in low profitabilityand susceptibility to cyclicality and regulatory risks in thesugar industry. These weaknesses are partially offset by MSSKL'sestablished regional presence in the sugar industry, longstandingassociation with farmers, and benefits from the upcomingcogeneration power plant.

Key Rating Drivers & Detailed Description

Weaknesses

* Weak financial risk profile: The financial risk profile is weakbecause of a high total outside liabilities to adjusted networthratio of 9.4 times as on March 31, 2016, and subdued debtprotection metrics, with interest coverage ratio of 1.9 times andnet cash accrual to total debt ratio of 0.04 time in fiscal 2016.

* Large working capital requirement: Operations are workingcapital intensive as reflected in gross current assets of 591days as on March 31, 2016. Since the sugarcane crushing season isonly between November and March, the society holds high inventoryof finished products post the crushing season, resulting in highyear-end inventory.

* Low profitability and susceptibility to cyclicality andregulatory risks in the sugar industry: Sugar is the largestagriculture-based industry in India and substantial governmentintervention in the industry reflects the large share of sugar inthe common consumption basket, and its importance to sugarcanegrowers. Sugarcane and sugar production in India tend to follow acyclical trend, wherein the production increases for two yearsand then declines for the next two years and recovers thereafter.

* Benefits from the increased cogeneration power capacity: Thesociety has increasedits cogeneration capacity to 30 megawatt(MW) from 16 MW in fiscal 2017. This may lead to improvement inrevenue and higher profitability.

Outlook: Stable

CRISIL believes MSSKL will continue to benefit over the mediumterm from its longstanding presence in the industry and the semi-integrated nature of operations. The outlook may be revised to'Positive' if higher-than-expected revenue and margins lead tohigher cash accrual. Conversely, the outlook may be revised to'Negative' if weaker sugar prices put pressure on the financialrisk profile and liquidity.

The ratings reflect the company's small scale of, and workingcapital-intensive, operations in a highly fragmented electricalequipment industry and below-average debt protection metrics.These weaknesses are partially offset by the extensive experienceof its promoters, moderate operating profitability, and moderatecapital structure.

Key Rating Drivers & Detailed Description

Weaknesses

* Small scale of operations in competitive segmentRevenue declined to INR17.5 crore in fiscal 2016 from INR22.5crore in fiscal 2015 on account of high fragmentation in theelectrical equipment industry.

* Working capital-intensive operationsGross current assets were high at 584 days as on March 31, 2016,because of large inventory of 449 days and debtors 260 days.Inventory was large on account of substantial stock of spares andother raw materials maintained along with high lead time requiredfor manufacturing machinery. Further it receives payment fromcustomers in around 5-6 months. Against these requirements thefirm receives moderate credit from suppliers; hence the companyrelies highly on bank lines to fund the gap.

* Below-average debt protection metricsInterest coverage and net cash accrual to total debt ratios were1.4 times and 0.05 time, respectively, in fiscal 2016 and willremain muted over the medium term because of continued highreliance on working capital debt, despite moderate profitability.

* Moderate capital structure:Networth and gearing were INR17.3 crore and 1.19 times,respectively, as on March 31, 2016. Capital structure will remainsteady over the medium term in the absence of any debt-fundedcapital expenditure (capex).Outlook: Stable

CRISIL believes PCL will continue to benefit over the medium termfrom the extensive experience of its promoters. The outlook maybe revised to 'Positive' if higher cash accrual due tosignificant increase in revenue and sustained profitability, orsubstantial improvement in working capital management leads tobetter liquidity. The outlook may be revised to 'Negative' iffinancial risk profile, particularly liquidity, weakens onaccount of further stretch in working capital cycle, low cashaccrual, or any major debt-funded capex.

* Working capital intensive nature of operations: RG's hasworking capital intensive operations as reflected by the highGross current asset (GCA) days of around 369 days as on March 31,2016. The firm has high inventory and receivables leading to highGCA.

* Below-average financial risk profile: Financial risk profile isbelow average due to high gearing of 2.7 times as on March 31,2016 and weak debt protection metrics as reflected by lowinterest coverage of 1.08 times for fiscal 2016.

Strength

* Extensive experience of promoters in the industry: Thepromoters have more than two decades of experience in theindustry. The extensive experience of promoters has helped RG inestablishing healthy relationship with suppliers in Africa,Malaysia and other countries, which helps the firm in receivingquality supplies.

Outlook: Stable

CRISIL believes RG will continue to benefit over the medium termfrom its partners' extensive industry experience. The outlook maybe revised to 'Positive' if there is an improvement in scale ofoperations and profitability, leading to higher-than-expectedcash accruals, thereby leading to an improvement in the financialrisk profile. Conversely, the outlook may be revised to'Negative', if the firm reports significant decline in revenuesor profits or undertakes large debt-funded capital expenditureprogramme, or any stretch in working capital cycle leads tofurther weakening of the financial risk profile.

Established in 1999 as a partnership firm by Mr. K.Ramasamy andhis wife Mrs. R.Ganapathiammal, RG trades in timber mainly inTamil Nadu and Kerala.

The rating upgrade is driven by CRISIL's belief that RDPL willmaintain its profitability and liquidity, which improvedmoderately, over the medium term. RDPL's financial risk profilehas improved driven by steady cash accruals and negligible term-debt repayment obligations. With expected revenues of around INR40-45 crores and operating profitability of 9 per cent duringfiscal 2017, RDPL's interest coverage ratio is expected to remainat over two times. However, management of working capitalrequirements, which are large for the company, will continue toremain a rating sensitivity factor.

The ratings continue to reflect the extensive experience ofRDPL's promoters in the cotton industry and the benefits arisingfrom its synergies with group concerns. The ratings also reflectan average financial risk profile marked by moderate net worthand improving debt protection metrics. These rating strengths arepartially offset by the RDPL's susceptibility to volatility inraw material prices, given its large inventory holding; changesin government policies, and customer concentration in revenueprofile.

Analytical Approach

For arriving at its ratings, CRISIL has treated unsecured loansextended by the promoters of about INR 4.8 crores as on March 31,2016, as neither debt nor equity as these are expected to remainin the business over the medium term.

Key Rating Drivers & Detailed Description

Strengths

* Promoters extensive experience in the cotton industry andbenefits arising from synergies with group concernsRDPL procures cotton partially from its group entities. Thesefirms are structured as partnerships and obtain raw cottondirectly from farmers in the Yewatmal region in Vidarbha. Thecotton is then ginned and packed into bales.

The arrangement ensures that the company benefits from a stablesupply of cotton inputs at reasonable rates. It also allows RDPLto procure cotton in small quantities according to itsrequirements and maintain lower inventory levels as compared toother spinning mills.

CRISIL expects the synergies with group concerns to ensureadequate availability and reasonable pricing of cotton for RDPLand support its business risk profile.

RDPL has an average financial risk profile, marked by moderatedependence on bank debt and improving debt protection metrics.RDPL's net worth stood at about INR 20.6 crores as on March 31,2016. With stable accretion to reserves, the net worth isexpected to improve over the medium term. The gearing continuesto remain moderate at about 0.77 times as on March 31, 2016.

RDPL's operating margin is expected to remain stable at around 9per cent over the medium term. Hence, with scheduled repayment ofterm debt obligations and stable operating profitability, itsdebt protection metrics are improving with expected interestcoverage ratio of over 2 times for fiscal 2017 and net cashaccruals to total debt ratio at about 20 per cent.

Weakness

* Exposure to risks relating to concentration of revenues from afew customers

RDPL's client portfolio is skewed with sales to the top-threecustomers forming over 60 per cent of total sales. Sales to KGDenim Limited accounted for over 50 per cent of total salesduring fiscal 2016. The company is, therefore, vulnerable tounexpected slowdown in demand from its customers with whom RDPLhas no long-term formal agreements. The company is also exposedto any change in business plans of its large customers. Further,the company's limited bargaining power with customers isconstrained by its small scale of operations in comparison to itsclients.

CRISIL believes that RDPL will remain exposed to risks relatingto concentration of revenue from a few customers.Outlook: Stable

CRISIL believes RDPL will continue to benefit over the mediumterm from the extensive industry experience of its promoters, andsynergies from group concerns. The outlook may be revised to'Positive' if the working capital cycle or scale of operationsimproves, leading to higher cash accrual and strong liquidity.Conversely, the outlook may be revised to 'Negative' if RDPL'srevenue and profitability decreases significantly, leading to lowcash accrual, or its liquidity weakens because of a large debt-funded capital expenditure (capex).

RDPL was set up by Mr. Hasamali Rana Karani and his family in2000. The company manufactures open-ended cotton yarn in countsof 6s to 20s, used in manufacturing denim garments. It operates aunit in Yavatmal (Maharashtra).

RDPL reported a profit after tax (PAT) of about INR0.41 crore onan operating income of INR45.5 crores for fiscal 2016 against aPAT of about INR0.63 crores on an operating income of INR43.6crores for fiscal 2015.

The rating reflects firm's initial phase of, and expected modestscale of operations in dairy products industry with averagefinancial risk profile. These rating weaknesses are partiallyoffset by the extensive entrepreneurial experience of partnersand their funding support.

Analytical Approach

Unsecured loans (outstanding at INR7.70 crore as on January 31,2017) extended to RMDP by partners have been treated as neitherdebt nor equity as these are subordinated with bank lines and arefully interest free.

Key Rating Drivers & Detailed Description

Weaknesses

* Initial phase of, and expected modest scale of operations: Ascommercial operations started in November 2016, scale ofoperations is expected to remain modest over the medium term inthe highly fragmented dairy products industry.

* Average finical risk profile: The financial risk profile isexpected to remain average due to start-up nature of operationsand sizeable debt contracted for project set up.

Strength

* Entrepreneurial experience of partners: With over a decade ofexperience in diversified industries, the partners experience isexpected to help in scaling up operations.

Outlook: Stable

CRISIL believes RMDP will maintain a stable credit risk profileover the medium term owing to experience of partners. The outlookmay be revised to 'Positive' if scale of operations, revenue andprofitability increase substantially. Conversely, the outlook maybe revised to 'Negative' if lower-than-expected revenue orprofitability weakens financial risk profile and debt servicingmetrics with liquidity.

The downgrade reflects CRISIL's belief that business andfinancial risk profiles will remain constrained by lowprofitability and consequent high reliance on external funding,over the medium term. The company has consistently incurred netlosses in the four years through March 2017 (INR5.73 crore infiscal 2016) because of a dip in revenue and muted profitabilitymargins. Despite cash profit till December 2017 on account ofsales of asset, improvement in operations will remain a keysensitivity factor. Deterioration in liquidity further weakenedfinancial risk profile, with interest coverage ratio declining to0.03 time for fiscal 2016. Gearing weakened to 4.02 times as onMarch 31, 2016, due to erosion of networth following net lossesand high reliance on working capital debt. Despite expectedimprovement in scale of operations, business and financial riskprofiles will remain muted over the medium term.

The ratings reflect susceptibility of SPIL's operating margin tointense competition in the plywood industry, and weak financialrisk profile because of high gearing and muted debt protectionmetrics. These weaknesses are partially offset by establishedmarket position and extensive experience in the timber industry.

Key Rating Drivers & Detailed Description

Weaknesses

* Susceptibility of operating margin to intense competition inthe plywood industryThe plywood industry has many unorganised players catering toregional demand to reduce high transportation costs, as price isthe main differentiating factor in this segment. This affectsoperating margins of established players such as SPIL. Plywooddemand and prices are also adversely affected by availability ofcheap substitutes such as particle and medium-density fibreboards.

* Weak financial risk profile

Losses and erosion in networth in the last few years anddependence on ICDs (at an interest rate of 15%) led to a highgearing of 4.02 times as on March 31, 2016. Debt protectionmetrics also remained muted, with an interest coverage ratio of0.03 time for fiscal 2016.

Strength

* Established market position and promoters' extensiveexperience: The company is a leading player in the brandedplywood segment with a strong brand prefix, Duro. Also, productprofile is diverse with facilities for manufacturing plywood,veneer, and decorative plywood.

Outlook: Stable

CRISIL believes SPIL will continue to benefit over the mediumterm from the extensive experience of its promoters. The outlookmay be revised to 'Positive' if a considerable increase inrevenue or profitability leads to substantial cash accrual, or ifworking capital management improves significantly. The outlookmay be revised to 'Negative' if financial risk profile weakensfurther because of decline in operating profitability.

Incorporated in 1957 as a private limited company, SPILmanufactures plywood and allied products. It became a deemedpublic limited company in 1974 and is listed on the Bombay StockExchange. Units are in Jeypore, Assam, and Rajkot, Gujarat. Italso owns a bought-leaf tea processing factory in Jeypore.

Net loss was INR5.73 crore on an operating income of INR182.31crore in fiscal 2016, against a net loss of INR75 lakh on anoperating income of INR203.36 crore in the previous fiscal.

SWASTIK DENIM: CRISIL Reaffirms B+ Rating on INR7.3MM Term Loan---------------------------------------------------------------CRISIL's rating on the long-term bank facilities of Swastik DenimPrivate Limited continues to reflect the modest scale ofoperations in the highly fragmented textile industry and modestfinancial risk profile marked by small networth and high gearing.These strengths are partially offset by the extensive industryexperience of promoters.

* Extensive experience of promoters: Benefits from the two-decadelong industry experience of promoters should support businessrisk profile.

Outlook: Stable

CRISIL believes SDPL will continue to benefit from the extensiveindustry experience of its promoters. The outlook may be revisedto 'Positive' if increase in revenue and cash accrual strengthensfinancial risk profile. The outlook may be revised to 'Negative'if low revenue or profitability, or stretch in working capitalcycle weakens debt-servicing ability.

SDPL, incorporated in 2012, is promoted by Mr. Sandeep Patani,Mr. Sanjay Patani, Mr. Chhogalal Vadera, Mr. Kishor Mundra andMr. Sachin Zanwar. The company is engaged sizing of raw cotton ona job work basis and started commercial production in April 2015.Its manufacturing unit is in Kolhapur (Maharashtra).

SDPL has reported loss of INR0.48 crore on net sales of INR9.37crore for fiscal 2016.

The ratings continue to reflect a modest financial risk profile,particularly liquidity, and susceptibility to intensecompetition. These rating weaknesses are partially offset by theexperience of the promoters in the leather footwear industry.

Analytical Approach

For arriving at the ratings, CRISIL had earlier combined thebusiness and financial risk profiles of UNISCO and UNICO LeatherProduct Pvt Ltd. This is because the two companies, togetherreferred to as the UNISCO group, were under a common managementand had fungible cash flows

However, CRISIL has now changed its analytical approach and hascombined the business and financial risk profiles of UNISCO andUNICO Leather Product & Co (UCCO), as the two entities togetherreferred to as the UNISCO group, are under a common managementwith significant financial and operational linkages. ULPP is nowhandled separately with no linkages with UNISCO as permanagement's stance.

Key Rating Drivers & Detailed Description

Weaknesses

* Modest financial risk profileGearing was 1.7 times as on March 31, 2016. Furthermore, exposureto associate companies has been high at INR54 crore as against anetworth of INR28.7 crore as on this date, constraining theoverall financial risk profile

* Susceptibility to intense competitionUNISCO group continues to remain exposed to intense competitionin the export market as reflected in revenue decline of 16%fiscal-on-fiscal in 2016. The operating profitability alsoreduced to 3% from 6.1% due to pricing pressure.

Strength

* Extensive experience of the promotersThe promoters worked extensively with other leather companiesprior to starting UNISCO; this has resulted in establishing astrong clientele base in the US market.

Outlook: Stable

CRISIL believes the UNISCO group will continue to benefit fromthe extensive industry experience of its promoters. The outlookmay be revised to 'Positive' in case of significant improvementin revenue and profitability, leading to better cash accrual andliquidity. The outlook may be revised to 'Negative' if there is adecline in profitability margins, large, debt-funded capitalexpenditure, or an increase in investments in associate entities,adversely impacting the financial risk profile.

Established in 2001, UNISCO manufactures leather shoes. UCCO,established in 2015, manufactures shoe uppers and supplies themto UNISCO. The day to day operations are handled by Mr. MohamedAkmal.

In fiscal 2016, the group had a net profit of INR3.2 crore on netrevenue of INR194.0 crore, against a net profit of INR2.6 croreon net revenue of INR231.4 crore in fiscal 2015.

The rating reflects exposure to risks related to the company'snascent stage and small scale of operations, and below-averagefinancial risk profile. These weaknesses are partially offset bythe extensive experience of the promoter in the automotivecomponent industry.

Key Rating Drivers & Detailed Description

Weaknesses

* Exposure to risks related to the nascent stage and small scaleof operations: Commercial operations commenced only in April2016. Though the promoter has extensive experience in theautomotive industry, the company is exposed to risks related toramp up in operations.

* Below-average financial risk profile: This is because of ahighly leveraged capital structure and weak debt protectionmetrics. The gearing, which was at 1.74 times as on March 31,2016, is expected to deteriorate over the medium term on accountof high reliance on debt to fund additional capital expenditureand working capital requirement. Debt protection metrics areexpected to remain weak over this period due to modestprofitability and weak cash accrual.

Strength

* Extensive industry experience of the promotersMr. E. Madhavan is a first generation entrepreneur and a well-qualified technocrat with experience of close to two decades inselling wet brake assemblies to tractor manufacturers in India.

Outlook: Stable

CRISIL believes VCPL will continue to benefit from the extensiveindustry experience of its promoter. The outlook may be revisedto 'Positive' in case of successful stabilisation of operationsand increase in revenue and profitability. The outlook may berevised to 'Negative' in case of a decline in revenue orprofitability, or larger-than-expected debt-funded capitalexpenditure, resulting in deterioration in the financial riskprofile.

VCPL, incorporated in 2014 and based in Vellore, Tamil Nadu, ispromoted by Mr. E.Madhavan and his wife Mrs Shanthi Madhavan. Thecompany manufactures castings for automotive components.Commercial operations commenced from April 2016.

"The affirmation of Sritex's B1 CFR reflects the company's robustrevenue and EBITDA growth in 2016, and Moody's views that therecent completion of its capacity expansion project positions itfor solid earnings and cash flow growth in 2017," says BrianGrieser, a Moody's Vice President and Senior Analyst.

Despite the strong earnings growth, debt is expected to increasein 2016, as the company finished its three-year expansion projectand invested in raw materials to support the ramp up of its newcapacity in the garment business. As a result, leverage - asmeasured by debt-to-EBITDA - likely rose to over 4.0x at 31December 2016 from 3.8x at December 31, 2015; tempering upwardratings momentum.

"The positive outlook on Sritex's CFR continues to reflectMoody's expectations that the company's earnings will benefitfrom strong demand for its textile and garment products in 2017,and that garment sales will represent a greater proportion ofSritex sales; thereby supporting margin expansion," adds Grieserwho is also the Lead Analyst on Sritex.

Moody's expects Sritex's free cash flow to turn positive in 2017,due to a combination of higher EBITDA generation and materiallylower capital expenditures. Moody's expects this to reduce Sritexreliance on incremental debt in 2017, for the first time sincethe start of the three-year expansion project.

The ratings could be upgraded within the next 12 months if Sritexmaintains its stable operating and financial profile, with cashflows exceeding capital spending.

In particular, debt-to-EBITDA levels approaching 3.5x and EBITA-to-interest expense above 3.5x would be supportive of an upgrade.The company would also need to maintain its good liquidityprofile, supported by high cash balances and committed bankfacilities.

A near-term downgrade of the ratings is unlikely, given thepositive outlook. However, the outlook could return to stable ifany of the following occur:

(1) Rising wages and other input costs reduce Sritex's costcompetitiveness, such that its EBITDA margins fall below 15% on asustained basis; (2) Sritex expands its business through debt-funded acquisitions or capital expenditures, such that debt-to-EBITDA exceeds 4.0x on a sustained basis; (3) Related-partytransactions weigh on margins or weaken cash flow prospects; or(4) Liquidity deteriorates due to either falling cash balances ora loss of access to its credit facilities.

The principal methodology used in these ratings was GlobalManufacturing Companies published in July 2014.

TOSHIBA CORP: Mulls Sale of Controlling Stake in US Nuclear Unit----------------------------------------------------------------Bloomberg News reports that Toshiba Corp. is considering the saleof a majority stake in its Westinghouse nuclear unit as thecompany grapples with construction delays and a multibilliondollar writedown in the business. Shares reversed an earlierdecline.

According to the report, the Tokyo-based company is reevaluatingWestinghouse's position within the group and it may deconsolidatethe nuclear unit by selling a controlling equity stake. Bloombergsays Toshiba made the announcement as it gained approval to delaythe release of third-quarter earnings until April 11. Sharesreversed losses of as much as 8.8 percent and gained 0.5 percentat the close in Tokyo, the report says.

Westinghouse has been at the center of Toshiba's most recentproblems amid cost overruns on nuclear projects and relatedlitigation, Bloomberg notes. While the company was due to reportfinal figures on March 14, it said it needed more time to examinereports of "inappropriate pressure" internally to push throughthe acquisition of a U.S. construction firm specializing inbuilding atomic plants, according to Bloomberg. Toshiba hasestimated it will need to take a writedown of JPY712.5 billion($6.2 billion) but it hasn't been able to get its auditors tosign off on the earnings results, Bloomberg relates.

"The shares are up because the company has come out and shown itswillingness to make strategic decisions about Westinghouse,"Bloomberg quotes Hideki Yasuda, an analyst at Ace ResearchInstitute, as saying. "The uncertainty over the extent of lossesin the nuclear business has been the number one source of worry.Sloughing it off would bring stability and a higher valuation forToshiba."

According to Bloomberg, Toshiba said on March 14 it is planningto sell about JPY160 billion of assets in the 2016 fiscal year.It also plans to cut the number of board members and have amajority of directors from outside the company, the reportrelays.

Bloomberg says Westinghouse appears to be already assembling ateam of lawyers and advisers to help with the restructuring. Thecompany has hired PJT Partners Inc., people with knowledge of thematter have said, Bloomberg relays. Lisa Donahue of AP Services,LLC, an affiliate of AlixPartners, will lead the Pittsburgh-basedcompany's operational restructuring efforts, Bloomberg reportsciting a spokeswoman at Westinghouse. It also brought inbankruptcy attorneys from Weil Gotshal & Manges LLP, Reutersreported earlier, Bloomberg relays.

As reported in the Troubled Company Reporter-Asia Pacific onDec. 30, 2016, Moody's Japan K.K. downgraded ToshibaCorporation's corporate family rating (CFR) and senior unsecuredrating to Caa1 from B3. Moody's has also downgraded Toshiba'ssubordinated debt rating to Ca from Caa3, and affirmed itscommercial paper rating of Not Prime. At the same time, Moody'shas placed Toshiba's Caa1 CFR and long-term senior unsecured bondrating, as well as its Ca subordinated debt rating under reviewfor further downgrade.

The TCR-AP reported on Jan. 26, 2017, that S&P Global Ratingssaid it has lowered its long-term corporate credit rating onToshiba Corp. to 'CCC+' and its short-term corporate credit andcommercial paper program ratings on the company to 'C', all byone notch. All of these ratings remain on CreditWatch withnegative implications. S&P also lowered its senior unsecureddebt rating on Toshiba two notches to 'B-' from 'B+' and kept therating on CreditWatch negative. On Dec. 28, 2016, S&P placed thelong- and short-term ratings on Toshiba on CreditWatch withnegative implications at the same time as lowering the long-termratings, in response to Toshiba's announcement that it mightrecognize several JPY100 billion in impairment losses related togoodwill arising from its acquisition of a nuclear power businessthrough U.S.-based Westinghouse Electric Co. LLC, because thegoodwill far exceeded the company's initial estimates.

=================S I N G A P O R E=================

HEALTHWAY MEDICAL: Unable to Pay Salaries to Doctors----------------------------------------------------The Straits Times reports that the turmoil at private clinicoperator Healthway Medical Corp (HMC) is coming to a head.

Not only has the Singapore Exchange (SGX) directed HMC to go backto shareholders to get their approval before drawing down on acontroversial loan, but the firm's clinics also appear to befalling into disarray, the report says.

Checks by The Straits Times showed that no doctors turned up forwork at seven of its family clinics on March 13. According to theclinics' receptionists, this was because certain anchor doctorsfell ill and no locum doctors could be found to take their place,the report relates.

At Healthway's Holland Drive clinic, a receptionist said over thephone that no doctor would be on duty this week, until the anchordoctor comes back next Tuesday (March 21), according to thereport.

In a weekend announcement, HMC disclosed that it had not paid thesalaries of its doctors and senior management, amounting toSGD3.9 million, for last month, The Straits Times relates.

The report says the company had started to fall behind onpayments even earlier, claimed a doctor who works for the group.The doctor, who declined to be named, said: "Doctors don't livehand to mouth. If they fold, they fold. I can work somewhereelse."

Asked how it was handling the situation, HMC said: "We have, andmanage, over 120 full-time doctors . . . Locums are in shortsupply due to the school holidays. On the other hand, ourspecialist and dentist clinics were relatively crowded today,"the report relays.

The Straits Times notes that HMC is in a liquidity crunch afterlosing millions of dollars in questionable loans to two entities.The SGX has called for an independent review of these loans.

HMC had a cash balance of just $527,000 at the end of last yearagainst trade and other payables of $27.7 million. It needs $10.7million to settle overdue payroll and debt obligations by March31, The Straits Times discloses.

HMC also has some egg on its face now after an onerous $70million convertible bond deal it inked in January with a fundcalled Gateway raised SGX's eyebrows and an outcry from minorityshareholders, according to The Straits Times.

The bonds would be secured on the shares of all HMC groupcompanies, meaning a default would result in a loss of HMC'sentire core business, the report notes. Gateway would also betransferred a controlling interest in HMC as part of the bondissuance. One day before the notes were set to be issued, SGXmade a rare move to step in. It told HMC the issuance must be putto a shareholder vote in compliance with Catalist listing rules,the report says.

HMC added in the weekend update that it has re-entereddiscussions with Gateway to consider alternative proposals, TheStraits Times adds.

Gateway told The Straits Times: "Any new proposal will take intoaccount the issues raised by SGX.

"Given the very weak financial health of the company, noresponsible lender would give money without tight controls on thecompany and on how the money was used."

If a shareholder meeting is held to vote on the Gateway deal, itis not certain how the votes will swing, the report adds.

Healthway Medical Corp is one of Singapore's largest privateclinic operators with close to 50 family clinics.

The affirmed ratings at the time of the withdrawal reflectedIREIT's relatively small scale and concentrated lease expiryprofile compared with rated peers. These risks are balanced by astable portfolio of quality assets with high occupancy rates andstrong tenants. The company's business and financial performancewas in line with S&P's expectations as of Dec. 31, 2016. S&Pexpects leverage, as measured by a ratio of debt to assets, toremain at about 40%, even while the company is growing throughacquisitions. This ratio allows for limited financialflexibility, given the 45% limit for REITs set by the MonetaryAuthority of Singapore (MAS). S&P expects the ratio of fundsfrom operations (FFO) to debt to be stable at 10%-11% over thenext few years.

Tikehau Investment Management Asia Pacific recently purchased 80%of the shares of the manager of IREIT. S&P do not view therecent change in ownership and control as having a significanteffect on the business or financial prospects. Tikehau willbroaden the mandate from office properties to include industrialand retail properties in Europe. S&P expects the leverage to bemaintained despite the acquisition strategy, due to the MASregulation. In addition, any risks due to property type orgeographical location are likely to be offset by increases inscale and diversity. S&P understands that Tikehau has a broadnetwork in Europe and should be able to source potential dealsfor the company.

At the time of the withdrawal, the stable outlook reflected theview that IREIT will gradually improve its portfolio scale anddiversity through acquisitions. S&P believes the company wouldalso continue adhering to its financial policy of keepingleverage below 45%. S&P also expects IREIT to maintain itsstable income and financial strength.

====================S O U T H K O R E A====================

DAEWOO SHIPBUILDING: May Face Crisis in April Due to Debts----------------------------------------------------------Park Hyong-ki at The Korea Times reports that Daewoo Shipbuilding& Marine Engineering (DSME), once one of Korea's biggestshipbuilders, faces a potential crisis, despite claims to thecontrary.

The Korea Times relates that the financial authority in SouthKorea has assured the market that the company faces no suchscenario where it could default on its debt. But the questionremains as to whether Daewoo can refinance and repayKRW440 billion owed to investors next month.

With the company running out of money without any new projectsthat can improve cash flow, the market remains concerned over thelack of liquidity, the report says.

According to the report, the state-run Korea Development Bank(KDB) and Export-Import Bank of Korea injected more thanKRW4 trillion into DSME in 2015. KDB is DSME's main creditor bankand largest shareholder with a 79% stake, the report notes. Butthe company has used most of that capital, and barely has enoughmoney to repay its April debt, the Korea Times notes.

Even after it pays debt due in April, it still needs to refinancedebt worth KRW500 billion due in the second half of this year. Intotal, the company needs about KRW1 trillion to repay its debtthis year, the Korea Times discloses.

The company raised about KRW1.8 trillion via new shares from KDBlast December, the Korea Times relays citing a regulatory filing.

DSME said the purpose of the fundraising was to improve itsfinances, the report relates.

"Daewoo Shipbuilding will exert efforts to resolve its liquidityproblem this year by securing funds from new project orders andimplementing self-rehabilitation," the report quotes a KDBofficial as saying. "KDB and other creditor banks will closelymonitor the company, and manage both its long and short-termliquidity."

According to the report, KDB CEO Lee Dong-geol said last month ata National Assembly meeting, "KDB is looking into ways to secureliquidity for DSME. It will come out with a plan in late March."

DSME's only hope at this point is to receive payment for twodrill ships the company built for Sonangol, Angola's state-runoil company, the report notes. DSME secured the $1.2 billionorder in 2013. But delivery of those ships has been delayedbecause Angola is in a financial crisis because of low oilprices, the report states.

The shipyard, along with two other major South Koreanshipbuilders, are currently undergoing self-created debt-restructuring plans in the face of a decrease in new orderscaused by the protracted global economic slump, according toYonhap News.

SM Group and three others made offers earlier last week to buythe cash-strapped STX, an affiliate of the now-defunct shippingconglomerate STX, Yonhap discloses.

Since mid-February, trading of STX, a trading firm, has beensuspended on the Seoul bourse due to the erosion of its capitalbase, according to Yonhap. The company faces the risk of beingdelisted if it fails to come up with measures to bolster itscapital base, Yonhap notes.

SM Group, a mid-sized shipping firm, reportedly plans to pourKRW130 billion into STX, according to the report.

Tuesday's edition of the TCR-AP delivers a list of indicativeprices for bond issues that reportedly trade well below par.Prices are obtained by TCR-AP editors from a variety of outsidesources during the prior week we think are reliable. Thosesources may not, however, be complete or accurate. The TuesdayBond Pricing table is compiled on the Friday prior topublication. Prices reported are not intended to reflect actualtrades. Prices for actual trades are probably different. Ourobjective is to share information, not make markets in publiclytraded securities. Nothing in the TCR-AP constitutes an offeror solicitation to buy or sell any security of any kind. It islikely that some entity affiliated with a TCR-AP editor holdssome position in the issuers' public debt and equity securitiesabout which we report.

A list of Meetings, Conferences and Seminars appears in eachWednesday's edition of the TCR-AP. Submissions about insolvency-related conferences are encouraged. Send announcements toconferences@bankrupt.com

Friday's edition of the TCR-AP features a list of companies withinsolvent balance sheets obtained by our editors based on thelatest balance sheets publicly available a day prior topublication. At first glance, this list may look like thedefinitive compilation of stocks that are ideal to sell short.Don't be fooled. Assets, for example, reported at historicalcost net of depreciation may understate the true value of afirm's assets. A company may establish reserves on its balancesheet for liabilities that may never materialize. The prices atwhich equity securities trade in public market are determined bymore than a balance sheet solvency test.

This material is copyrighted and any commercial use, resale orpublication in any form (including e-mail forwarding,electronic re-mailing and photocopying) is strictly prohibitedwithout prior written permission of the publishers.Information contained herein is obtained from sources believedto be reliable, but is not guaranteed.

TCR-AP subscription rate is US$775 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the samefirm for the term of the initial subscription or balancethereof are US$25 each. For subscription information, contactPeter Chapman at 215-945-7000 or Nina Novak at 202-362-8552.